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Pay Differently with Paul Reiman · Disengaged

• Paul Reiman: best practice is either a product that somebody wants to sell and as a result it's common, but not necessarily proven as best. You know, or it has a success story behind it, but that doesn't mean that it will work in all circumstances. Like those are kind of the two branches of best practice that I poke on. I sold them, right? Like I was part of pressing them when I was a consultant. You James: in. Paul Reiman: know, I implemented some best practices when I was in house that didn't didn't work. And you know, that's what that was really the eye opener. It's like, wow, these are true ish, but aren't always going to really be what's best for me. you know, so that's the thought behind it is just because we know about it doesn't mean it's really gonna be the best answer. It's just maybe a good answer. Maybe one I should think about. But let's be careful just assuming, you know, rip and replace. Like this is gonna be what works. I've not seen that work consistently ever with any of these best practices. James: Hello and welcome to another episode of Disengaged. My guest today is Paul Reiman Paul is the founder and managing partner of Novo Insights, a Chicago-based compensation consulting firm. And Paul himself, like me, for many years, has specialized in sales compensation advisory. Paul has spent nearly 30 years in the compensation profession, advising companies but also working in-house with companies. His new book Pay Differently, soon to be released, Argues that pay transparency is beginning to expose all the assumptions and all the shortcuts that compensation teams have made in the past. From vague pay philosophies to ungoverned job architecture to pay decisions that no one could defend in the moment. And a merit cycle that ends up underpaying the people that stay with the company. we talk about what Paul calls the loyalty tax. Why the offer letter carries less oversight than the merit cycle and how people coming into the company end up getting paid more than the people who stay there. If you'd like to learn more about the book or sign up for the release, you can follow Paul on LinkedIn or you can go to paydifferently.com. On another note, I have released my own most recent book, Close the Gap. And if you are in San Francisco, and if you are free in the evening of 30th of September, please do join for the book launch. There will be wine, there will be food, there will be free books, And there might even be an after-party. The book launch is sponsored by Infinite Equity. So if you'd like to sign up, please go to infiniteequity.com/closethegap. Or follow me on LinkedIn and you'll find a recent announcement. So without further ado, I give you Paul Reiman author of Pay Differently and founder of Novo Insights. Paul Reiman Welcome to disengaged. Paul Reiman: Thanks for having me, James. Great to be here. James: it's great to talk again. As we've spoken a few times, and we were on a panel a while ago, and I came up with a nickname for you. Do remember the nickname? Paul Reiman: Man. man. Now I'm embarrassed. I seem to recall being branded in some form, but now I don't remember the brand. James: It was the Baron of the bass. The Baron. You are the Baron. You'll always be the Baron to Paul Reiman: the base. That's right. It was in a I like it. I'll take the Baron. James: me. Paul Reiman: like I feel like I need a new nickname for you 'cause I still look at you, James, and I still picture you with longer hair. 'Cause I James: Yeah. Paul Reiman: think I I'm jealous of the the flow that you had. Now I feel like we're competing in the same brand space. Like James: I know I didn't check with you before I buzz as well. Like I should have really said, is this okay? Is this like, know, patented or something else? Paul Reiman: You don't you don't need my permission. James: I came up with the name The Baron of the Bass because you are a bassist and you Paul Reiman: That is true. James: have a band. So what is your band's name? Paul Reiman: Yes, I've played in a band called the Salary History Ban(d). And the little D needs to go in parentheses. And it was formed when the salary history ban was all the rage. Right? The don't ask about somebody's past pay just fell. It was a mistake. A leader thought I was saying banned. You know, something about salary history ban in a in a document. He's like, What do you mean band? I'm like, no ban. Just made a perfect band name. James: Yeah. Yeah. And which just means that you've been going for a while, but you're still playing, right? Paul Reiman: It's been less. 'cause it's with a group of lawyers and you know, lawyers, and time, right? There's a lot of things that sort of compete for attention. But yeah, it's still active. Still active. We we don't play as much, but definitely still active. James: I'm glad to hear it because I think in many ways you are the bassist of the comp world. You're setting the rhythm, you're offering the tone, you're adding depth to Paul Reiman: Look at that. Woo! James: the world of comp. And I don't think there's any better way to add depth than with a book about comp. you haven't released this yet, have you? So the name is Pay Differently. And when is the release date for Pay Differently? Paul Reiman: Formal launch date is October fifth. James: October 5th. Okay. So tell me about, well, before we get into the book itself, there's a lot of very interesting points here and, and we, we've debated in the past, we've agreed in the past, but I really like speaking with you because we always have something to talk about. Paul Reiman: Totally. James: So talk to about, talk to me about the genesis of the book. Why did you decide to do it? What are you trying to do with this book? Paul Reiman: Yeah. Yeah, it couple of I I I might even give you some credit for inspiring this a little bit, James. I mean, I think when I was growing up as a consultant, you know, people with books were like the top of the field. and at the time it was a little bit of I'll never have anything to say. Right? Like there was always that feeling of my words could not be worth reading. you know, and I think as t Yeah, I think it's normal, right? And I think as James: I get that by the way. I think everyone does to be fair. Paul Reiman: time went on I was in enough discussions where I would say something and people go, that's a great point. that's a great point. It's like, maybe I do have something to say. I also think there's a point where you just get old enough, you've collected enough stories that they can be sort of codified as wisdom. Right? You're not making I didn't make James: Right? Paul Reiman: anything up, right? These are all true stories that are told sort of to open each chapter. Just been around a long time and have learned from a lot of people, been engaging a lot of different scenarios. So it It felt like there was something to say is sort of the long or the short version of what I'd have said in many words. I think the other is, you know, you have one in this space, but there's not a lot of books really written for comp people. James: Surprising, it, really? this is why think it's a really good thing that you've done it. Because I do think there is a gap here. Remarkably, there's a gap. Because there is a profession around comp, but there also isn't, really. There's no exams. There's no real codified. There's not accounting or law where you've got qualifications and modules. But there isn't really a manual. And when you're learning comp, I assume you found this the same way. You just kind of pick it up. And Paul Reiman: Totally. James: you often just don't know what you don't know until it's too late. And that's why you learn your lesson. So I think it's really good that you're actually documenting some of this because, Paul Reiman: Yeah. No, I appreciate that. I mean it's a point I make in the book that nobody chooses compensation. Compensation chooses you. I've used that line before and you know, there are courses of study, but they are limited. Like there is a class in an HR management degree for comp. so there's a lot of you've got to pick it up. A lot of people are converted from finance. You just gotta figure it out. And and that was the other part of why writing it the way I wrote it is while there are a few things out there. Honestly, they're just not right anymore. Right. And I think you're a you're a thinker like this too, James, where the things we were taught are true, quote unquote, back in, you know, nineteen ninety-nine when I started in this business, just aren't true anymore. So it's like it's time James: Mm-hmm. Paul Reiman: to open people's eyes to the fact that don't just accept truth as truth, challenge a little bit, then form your own conclusion and some things you can continue with. But that was James: Mm-hmm. Yeah. Paul Reiman: the other thought. Is there's just a lot of dogma out there that needs to be poked a little bit and advanced. So that was the second James: Mm. Paul Reiman: reason. Like I finally feel like I have something to say and this discipline kind of needs a voice that pushes us forward and I hope I can be part of that. James: Yeah. And you're absolutely right as well because there isn't really a right or wrong way. There's consensus, certainly, but consensus isn't even always the best idea. when I was first learning, you bought this over what, 30 years now you've been doing this? Yeah, 30 years. Paul Reiman: Pushing it, pushing it. I'm feeling it every morning, that's for sure. James: And I've got a note here that you started as an intern at 19 from your bio. So a year Paul Reiman: True story. James: after graduating and you liked spreadsheets, which is kind of similar to me. I really liked. working in spreadsheets, which is kind of sad to me now because you don't really need it as much anymore. Like you can just get get Claude to do everything is that saddens me. Paul Reiman: I know. I I i it was a a big moment for me. I want to say two years ago, someone on my team did something in in Excel I didn't know how to do, which I'm like, I've I've moved on. Like I was James: Wow. Paul Reiman: that guy who knew how to do it in Excel for a long James: Hmm. Paul Reiman: time and now my work has changed and I don't spend as much time in it. And and Claude can do it even better, for sure. James: painful part, like I'll write a formula or functional or something. I'll give it to Cordova says a more efficient way to do this. Yes, several. Okay. All right. All right. As long as it's been me and Cordova. Paul Reiman: That's Clearly I'm no longer the the pinnacle. James: But yeah, what you're saying about dogma, I think it's really interesting because I think there is a lot of sort of almost like pop dogma or pop best practice in comp, which you do a very good job of pulling apart. Like, and we'll come onto some of those things as we go through the conversation. But one of the things you talk about is the myth of best practice fairly early on in the book. And so you have a quote here, which is very, very close to a quote that I had. But we didn't confirm this. And you were written it before I released my book. And I believe, and we're getting this right. You said, what we call best practices in compensation is usually just common practice with a better publicist. One thing I say, but I want to get your thoughts on this concept of best practice. One thing I've always thought is that if it truly was best practice, you'd never have heard of it before. Because best by definition is better than anything that already exists. Paul Reiman: Yeah. James: which means that it's different from whatever you've heard. So when people say best practice, are you sure it's not this really, really common practice that you know is not going to get shot down? So talk me through the myth of best practice Paul Reiman: Yeah. Well, that's what it is. At the end of the day, I think there's really and we unpack it a little bit in the f opening of the book, 'cause this is really one of the things that opened my eyes to why we need to think about this differently. You know, best practice is either a product that somebody wants to sell and as a result it's common, but not necessarily proven as best. You know, or it has a success story behind it, but that doesn't mean that it will work in all circumstances. Like those are kind of the two branches of best practice that I poke on. you know, and I just I j I sold them, right? Like I was part of pressing them when I was a consultant. You James: in. Paul Reiman: know, I implemented some best practices when I was in house that didn't didn't work. And you know, that's what that was really the eye opener. It's like, wow, these are true ish, but aren't always going to really be what's best for me. you know, so that was my c you know, that that's the the the thought behind it is just because we know about it doesn't mean it's really gonna be the best answer. It's just maybe a good answer. Maybe one I should think about. But let's be careful just assuming, you know, rip and replace. Like this is gonna be what works. I've not seen that work consistently ever with any of these best practices. James: And you got a question back and someone mentioned as a sales leader from telecom sector that said best practice according to whom Paul Reiman: You know, it it it's like you know, and in that that context was particularly I think I was literally twenty two year old twenty two years old sitting in a room I didn't belong in. And I'm like, You're right, I have no clue Like according to me, the expert of the world who can't even rent a car. Like you know. James: Right? So I think every consultant or advisor, whatever they are in the professional service, you kind of get this sort of, you get this confidence from the people that you're with. And say, I've got a suit as well. I'm a consultant now. Paul Reiman: That's right. James: And then at some point, someone will shoot you now and then show you how little knowledge you actually have. This happened to me several times in my career when I thought Paul Reiman: Totally. James: I was confident, I was wearing a suit, I was flying around, I was advising people. And someone will say something, I've got absolutely no answer for that. OK, so that's very humbling. Paul Reiman: Yeah, totally. And and and she was right, right? Like what we were talking about, like I could not prove and I think you're really good at calling this out in your in your works too. Like there's no science that said three measures in a sales incentive plan. Like there's science around the psychology of simplicity. There's science around but like how that manifests is three measures in a plan, no one less than twenty percent. Like you actually can't prove that, right? It it's not provable to an extent James: Mm-hmm. Great. Paul Reiman: and there certainly isn't evidence that shows that it works. So she was right. James: But it's testable. And this is the thing that frustrates me, I think. The lack of experimentation. It's not provable. None of this provable. It's only human. But you have evidence. You have research that will support directions and say one is more likely to be successful than the other. But you also have the capacity to test. And there's a real lack of testing, the real lack of experimentation, until we're forced to by transparency legislation or something like that. And one of the things you mentioned, there's a lot of things that stick around. Broad salary bands. something specific and you mentioned this and you mentioned that they kind of outlived the problem that they were meant to solve and I remember being taught early on that broad bands are great because they give discretion they give permission for leaders to make informed decisions about their pay and pay their good people more and their bad people less and So I'm kind of I'm kind of curious what would you think companies are doing right now that people are going to look back on in? 50 years or something and to say well, that was ridiculous Paul Reiman: Yeah. I mean I do I do think in not even in fifty years, I do think this push pull on how transparent do we want to be is one that's gonna just fly by the wayside eventually. Right? Like some of it's legislated, some of its expectations. I do think there's a class of employers, hopefully more and more and more, that just wanna have good relationships with their workers and transparency is a good thing in that regard. So I do think We're still operating in a you know, I'll use some of your words, sort of a control era around like, no, I have the data, you don't get the data. And I feel like that's gonna change. so I do think that's why the premise of the book is it's time to pay differently because everything we've done sort of pre transparency is gonna be put under pressure and this transparency thing's not going away. You know, EU P T D may have been a little bit of a sad trombone and it didn't sort of take root the way we thought it would in the moment. Right? The like it's a little bit of that. People James: That just immediately went into my mind. Paul Reiman: know what it means. You know, but it it's still the the premise is not going away, right? Whether it's legislated and somebody's saying, No, it's good for society for us to do this, or it's just, you know, workers that are like, I don't want to apply for that job if you won't tell me what the range is. Like there's enough catalyst for change there that the fact that some organizations are still thinking, maybe we just will only do it where we have to. James: Yeah. Paul Reiman: I think that practice is gonna be one we just scratch our heads for sure in a number of years. James: I mean, have to, but the direction of travel is that direction. Like lot of the legislation came from a very adversarial relationship between employee and employer. And we've de-adversarialized it over time. Like it is now for a lot of companies. And also the top talent, the good people that you want are going to look for that less adversarial working relationship. Paul Reiman: Yeah. Yeah. James: And what I do worry about is people are to look at the, I would say, failure of early transparency legislation. There's no evidence to show that it's done anything yet. But there's also no evidence to show that it's been done in the right way that would yield better fairness it's Paul Reiman: Totally. James: a threat. But legislation is a very slow way of changing things. Like, it tends to take a while before that starts doing what it's supposed to do. Paul Reiman: Yeah. I think the worker expectation that will accelerate it faster, right? Employers will always James: Mm-hmm. Paul Reiman: as brands emplo employers poorly, but will always do the least amount possible to comply with a law. Right? Nobody James: Yeah. Paul Reiman: goes above and beyond to fill out that EEO one report and things like that. So you'll look at the rule, you'll make sure your posting complies with the rule. Well workers aren't giving you rules, right? They're just They walk or they won't apply or they're gonna ask questions and keep asking that same question over and over again until they get an answer they want. So that's a greater catalyst for change than anything one more state or one more country can legislate. James: Right? Yeah, yeah, just good old composition. Like if you want the best people, then you got to start respecting what they're looking for. And there's so much data to say people want their salary bands. People won't apply for a job if they can't see their salary bands. People want to believe they're paid fairly. this idea of fairness is wholly subjective as well. And I think a lot of companies Paul Reiman: True. James: think that by benchmarking aggressively, by having ranges, by building job architecture, by having nice, tight job descriptions, that they've solved fairness. And they just haven't. doesn't matter how good that science is, if it's still behind a closed door, it will Paul Reiman: True. James: be perceived as unfair. And this is where everyone's paid the same, basically. Paul Reiman: Yeah. Yeah, it's it's the source of one of the places we disagree the most. But it's but it's the same concept underneath it, which is fairness James: Mm. Paul Reiman: is ultimately a perception of a of a consumer, right? The consumer is the employee. And what do they perceive as fair is really what drives fairness for them. And, James: Yeah. Paul Reiman: you know, how do I do that for four thousand people in a four thousand person company is really hard. you know, and there's different choices that people and organizations can make in designing systems and designing bands, but yeah, just because it shows up at the seventy fifth percentile of some survey in itself means nothing to that perception. Right. James: No one cares about the percentile. It's like, you know, it's like if you go to a shop, and you buy something for $100 toaster, a good toaster. Yeah, it's a good toaster. I need buy a new toaster as well. At Paul Reiman: That's a good toaster. James: this point, I'd be wanting to pay $100. I'm so annoyed with my own toaster. need to upgrade it. Anyway, so say you find a Paul Reiman: Ha ha ha James: toaster for $100. It's a perfect toaster. You love this toaster and it just makes the perfect color of bread and bagels and all that kind of stuff. But then you go to the shop the next day and it's on sale for $50. You say, I've overpaid. Now, you didn't think you were overpaying the time you bought the toaster You were very happy with that toaster But as soon as you find out there's a cheaper version of that thing, you believe that you've paid more than you needed to pay. And it's exactly the same with pay. You can be paid a number and think it's brilliant until you find out that someone doing the same job has paid more than you. And then no amount Paul Reiman: Totally. James: of science and explanation will make you feel that's fair. Paul Reiman: Totally. Totally. And you might be very happy with your pay. Like not even just like you felt good about the offer you accepted or whatnot, but like your I my my needs are met. I'm happy at home. It's more than what I made before. Like all the things that can trigger a sense of satisfaction with that pay, they just went away, right? Because that loss looms larger than that gain and that thing that I just James: Yep. Paul Reiman: learned that's not great hurts. And as a result, now I'm sour, right? And it can change like that, you know, literally like that. James: Yeah, I do find it fascinating just from a cycle. This is a bit of a rabbit hole. So I to come back out of this rabbit hole. But the idea that loss is way twice as heavily as gains from like Tversky, Kahneman research, right? And they won a Nobel Prize for this, well, the body of research. But if you lose $10, it hurts twice as much as winning $10. But it works outside of finances. So Theresa Amabile and Stephen Kramer did the progress principle. And they found that the negatives of the workplace harm your inner work life twice as strongly. Paul Reiman: Twice as much. Yeah. James: So this pattern of negatives being twice as powerful as positives comes up again and again in human psychology, which actually does bring me neatly and tidily onto my next question, if I can work this because Paul Reiman: Look at that. James: your test for a compensation philosophy. And it kind of comes into this idea of subtractive versus additive. When we think about how to help people, sometimes you can help people by not doing something rather than by doing something. We always default to doing something as a solution. but sometimes it's not doing the thing that's causing problems. And your test for a compensation philosophy is whether it helped to say no to something. So talk me through that. Why does the ability to say no empower you as an organization? Paul Reiman: Hm. Yeah. Yeah, it's a good it's a good point. I think nothing makes it clear what you stand for until you have to stand against something is sort of another way of saying the same concept. So, you know, we tell the story in the book about like you could chat GPT your way to a comp philosophy and it's gonna say a lot of words that sound super professional and polished, but mean absolutely nothing. Whereas being clear about who you are or who you aren't, which will require you to not do something. So just as an example, I worked for, you know, a publicly traded fintech company that competed for talent with Wall Street stock analysts. But we weren't gonna pay like Wall Street pay stock analysts. So our philosophy had to be very clear. We're not trying to attract the best, the brightest, the fiftieth percentile of some market. No, we are trying to attract somebody who wants to do the work we do. you know, in this way with this type of lifestyle, that's not a Wall Street stock analyst. So it helped us say no to that star analyst who asked for a million dollar salary. Nope. Not how we work. Right. So that's just a a practical example. And and I I'm being flippant about it. We weren't like negative and souring. It's more we were very clear about who we were. And it did help us not chase that shiny object kind of in a moment. Like that's a comp philosophy that orgs need is clarity about who you are, who you aren't. And as a result, what won't you engage in? you James: Mm-mm. Paul Reiman: know, rather than the flowery we'll attract and entertain the brightest, we pay for performance. Like, okay, but but now what? James: Yeah, it's like sometimes it just tries to be all things to all people, doesn't it? Do you find as well, it's, find that companies will agree on that philosophy, but then one leader won't and therefore hell will break loose because they can't get the person that they believe they need to. Like that's the real test, right, of a comp philosophy. Like what happens in those scenarios where it's a strong Paul Reiman: Yeah. James: philosophy? Paul Reiman: That's a great point. I think a alignment's a strong word, but like people have to agree to the rules and that's why having it is so important, 'cause you'll hire in knowing that philosophy. Right? Like when you just change your mind suddenly, it breaks 'cause you don't have that sort of vision of consistency. you know, and in the example that I just gave about my operating experience, I think that's what the the leadership of the HR function saw as their primary purpose was sort of the shepherding of consistent philosophy around the workforce. James: Mm. Paul Reiman: Like our leaders spend an inordinate amount of time like re-educating and sort of saying, no, no, no, this is how we do it. And and it it did require a little bit of policing at times. But then once you policed somebody once, they got it. Right? Like you do have to set a standard for no, this is how we operate. This is our culture. This is our vibe. It's worked for 30 years, you know, and we see it still working today. So here we you know, so there was it was a it was a passion and a a big body of work to maintain that alignment, you know, but it was really important to that organization's people strategy, to its founder, to sort of maintain that way of working. James: Yeah, and you said a few really important things. And the last thing you said to its founder, like it needs executive sponsorship Paul Reiman: yeah. James: and agreement. This is not what we think. This is what your leader thinks. Paul Reiman: Totally. James: And we agree with and you also mentioned another thing, which was time. Now, one of the things that frustrates me is chopping and changing. Like one minute, it's this thing, the next minute, it's that, and then we use this server provider, then we use that server provider. We're struggling a bit for talent, so we're going to shift the 60th. Then why would anyone believe you had a philosophy if you're changing it all the time? Well, why shouldn't I just keep creating my own one? That consistency Paul Reiman: Totally. James: piece, I think is a real issue for some companies. Paul Reiman: Yeah, I agree. I we actually actively challenge when organizations will say, like, this is our philosophy, and it just says, look, we pay at the seventy fifth. I'm like, a percentile's not a philosophy. Like James: No. Paul Reiman: what you're I what I think you're saying is you believe that you want pay to be ex you know, very attractive relative, you know, in that conversation you want it to be sort of a tailwind, not a headwind. Let's not talk about percentiles, because you're guessing, right? Like all market data sources are a little bit of an estimate, like James: Hmm. Paul Reiman: You're gonna change your mind at some point. James: Yeah. Paul Reiman: Like that's something more durable needs to be how you think about it and why, not how you execute it. Yeah, write down somewhere that, you know, you benchmark against the seventy fifth, but that's different than what you would sort of communicate. Nobody you know, you you said it earlier. Nobody cares. James: Right. Because nobody cares. Nobody cares. Nobody cares. And also, we should have also de-jogged the percentile. So if you say that you're paying at the 75th percentile, a lot of people take that to being 75 % of the market, Paul Reiman: Of James: which is a really common misconception in compensation is why you've got to understand the basics of statistics. And you've got to understand that people won't understand as well. So when you say the 75th, that means you are paying. all things being equal, more than three quarters of the companies you compete with, right? Say in a given sample. But as you say, in reality, what sample, which companies, which people for which jobs, that all of that can change the number that you end up with. So just saying that percentile does not say philosophy make. Paul Reiman: Yeah. That's right. Seventy percentile of what? So it's like I'd rather have an organization say, like, we we wanna you know, we want to be a strong payer relative to the software companies in San Francisco. Like that's at least clearer about what you're doing. Now that would be difficult to accomplish, but like at least that's clear about what you're trying to do and the data source, the methods. You know, that's an operational choice that nobody cares about. But But that's testable by an employee to like, Okay, if I were to go out and get an offer, it should be not higher, right, than what mine James: Yeah. Paul Reiman: is now. And like that's a testable thing and that tells people what you stand for. James: So when asked about job architectures, had a line in here that said job architecture is the office refrigerator of the HR function. So two questions here, two parts of it, because first of all, we are very familiar with the concept of job architecture because we've been working this for years. Not everyone knows what job, or they've heard it floating around with HR people, they're not exactly sure what it means. So my two part question is one, would you mind clarifying for us exactly, exactly what job architecture is? And then why do you think of it as the office refrigerator? Paul Reiman: Yeah. So from a definition perspective, a job architecture is a way of codifying what work is similar and not similar to other work in the organization. that often gets translated into a big matrix of like job families or types of work and then levels of job, just so you kind of understand scope, complexity and whatnot. But but at the end of the day, it's just knowing I do this, am I doing the same thing as that person? Am I doing something similar to that person? And what is the next job I might want? Right. So it's just an organization or a taxonomy of the jobs within an organization. it's the office refrigerator because everybody uses it and it's nobody's job to clean it. Right. So you think about James: I like that. Paul Reiman: the office fridge, like it just collects a bunch of stuff, right? Why are there you know, a hundred and eighty old ketchup packets in the office fridge? Because you're like, I'll just throw it in there. It's fine. It doesn't hurt anything to add my extra ketchup packet after lunch. Next thing you know, we got an overflowing shelf of 180 ketchup packets, right? and that's what happens with with jobs as well, right? I'll just add one more title. It's fine. I'll make an exception and I'll call this person a senior, even though that's not really how we think about the job. Right? All the all the things that on a one off basis feel fine, but then you step back and go, Wow, this is not what we wanted it to be. Right? This is unmaintained, unclean, and not useful as a result 'cause just packed with a bunch of crap. It smells funny and you know nobody wants to dig in and and use it anymore. So it's a strain metaphor in part, but it works. James: I like it. It works like the metaphor holds pretty, pretty strongly. So and then sometimes you just need a new fridge, which is when you asked to just come in and just rework everything right and to start from scratch. Yeah, yeah. Paul Reiman: That's right. Either clean it up or get a new one. Like those are your choices. Or I mean, in every company I work for, there was always that fateful day that somebody drew the short straw and had to go throw everything out of the office fridge and you know, like it just has to happen. Like you actually can't incremental your way to it. Taking one ketchup packet out at a time doesn't solve the problem because somebody's gonna see that pile and throw the next one in anyway. Like you actually James: Mm-hmm. Paul Reiman: have to take bold action sometimes to clean these things out. James: Yeah. So one thing I'd like to get your thoughts on actually, when I look at a lot of the trailblazing companies, one of the characteristics is very simple architecture. They don't bother. They really don't. They keep the levels as simple and minimal as possible. And the number of jobs they keep quite minimal as well, because they don't want political finagling over what job who does what. And I just wonder how you see that. in the era of transparency as well, because one of your points actually is that transparency doesn't create problems, it will reveal the problems that were already there. So if we're shining this light, what does that say about job architecture and what direction do you think job architecture is headed? Paul Reiman: Yeah, I do think simplicity is the direction of travel, using your word again. I think fewer delineations is helpful, not hurtful, because it's harder to explain delineations on the margin always. So an example, you know, I was raised in a world where there was this hard line between you're a management a manager or a professional, right? The sort James: Hmm. Paul Reiman: of career tracks. And the more you put that under scrutiny, the harder it is to actually define the difference, right? Well, it's anybody with a direct report. Well, what about an intern? Does an intern count? What if I have a direct report? Then I don't have a direct report, then I do. Do I lose my managership sort of in the interim? you know, like what about what if I automate it? What if it's outsourced? Like all these what ifs like quickly challenge the definition on the margin? totally. James: Yeah, what if there's an agent as well now, like I speak to somebody and they said they're a director, but they've just got a whole bunch of AI agents working for them. Paul Reiman: Right. Yeah. I in a world at work thread I even said that. Like what if I had a team of five, two left, so I felt very under stress, and then as a result, I found a way to automate the other three. Same work James: Mm. All right. Paul Reiman: output. Literally the same work output I started with. But I have no direct reports. There's no humans supporting the orc effort. Does that make me less of a manager? Maybe. but explain that to that employee. That they become less valuable because they added value to your organization that doesn't fit, right? So I It's just an example of one of those delineations that had become a bit dogma in our sort of interpretation of job architecture that's sort of ready to change. so I do think simplicity is what workers want. They want to sort of see what growth looks like and how and where they fit without too many words to explain it. I do think some of those trailblazer companies start with that, and as a result, you can stay simple. Right. It's when you allow that complexity to creep in, which, you know, if you got eight thousand people on a global basis, it's there. It's really tough to strip it all the way back. Right. James: Mm. Paul Reiman: But I think having on the margin mechanisms to say, no, a a senior engineer in India is the same as a senior engineer in the US. Let's make that's we use the same job everywhere. Like that's really easy and simple, but powerful when you stop creating all of these different branches in the tree. James: So pay is the most visible signal of value in the organization. So that's why a 3.2 % means more than the 3%, even if it doesn't. It's not the dollars that important. It's the signal that it sends to the people to get in those two different areas. Paul Reiman: Right. Totally. Totally. James: And I think when you get these complicated architectures, everything becomes a pay conversation. Every move, every promotion, every job, I am this, you're that, it's all well, your worth is this and my worth is that, why? Explain it to me. So to me, those conversations, there's such a waste of time, there's such a waste of time. If you actually look at your goals as a business, your goals as a business is not to spend hours on compensation conversations, right? No business goal, is it? So the more you can simplify them, as long as pay is good enough, that it ceases to be a problem or even... explained it clearly such that if there's a problem, need to go somewhere else. Like your bank is rent. If you want more money, go join a bank. Like it's pretty clear. But that's, that's the thing for me. Like you've to stop changing. You've got to stop making every career conversation a pay conversation, because that's kind of what it always felt like to me growing up was like, if you want a career change as a paycheck, you want to pay change as a career. It's a whole thing is all anchored around pay. Paul Reiman: Yeah, I do think the bundling of that is is the challenge, right? I I mean I do think there are workers to our point earlier about like fairness is in the sort of perception of the worker. There are some workers who want that conversation, who need that conversation, even if it's not all that valuable on the margin. Like that's how the that's their love language. They want to know that they got a little bit more than somebody else. They want to know that they got a raise. Like James: Hmm. Paul Reiman: see that's why I still advocate for some value in having a mechanism for. The question is James: Hmm. Paul Reiman: how do you make it less irritating? How do James: Yeah. Paul Reiman: you not sort of set yourself up for failure at scale, you know, where everybody's expecting a big raise and then they don't get it? Like how do we avoid that sort of foot fault in the process so that you can spend time where it's valuable and you can keep it simple when it's not? yeah. James: Hmm. And I'll go a step further as well. First of are you an organization that engages in those discussions? So when I had Alfie Kohn for example, I asked him this, said, like, what about people that want more money? What about people that do want a bit more money? And his response was more, as you can imagine, more sort of whimsical. And he's like, well, that's largely training. The world's trained people to crave those increments. And if someone's coming in with that, it's not necessarily their fault. But equally, If you're hiring someone that only will do a bit more work for a bit more money, then Good riddance. We don't want people that only do a bit more work for a bit more money. So I do think, yeah, if you are the company that is willing to embrace that, then you need a mechanism for it. First question is, are you a company that is willing to embrace it? Because there are companies that don't entertain that and have no negotiation policies. Very small minority in North America, much more common outside of North America. But then if you are embracing it, then what are the rules of engagement? How do we play this game? How do we make it clear and unbiased? Paul Reiman: Totally. Totally. And and while, you know, you you asked the question earlier, what's something in fifty years we might look back on and be like, huh, this could be one of Like this could be one where everybody realizes this incrementalism, this sort of finite differences between people and work. I mean, maybe that's the logical extension of a more transparent world someday. Maybe. What I know is James: Hmm. Paul Reiman: I don't even get stuff right five years in advance, let alone fifty. So, you know, I tend to focus James: Exactly. And who knows? Paul Reiman: more on like what's my next best step? And my next best step for most clients is not the fifty year vision, it's the five year vision. Let's not make James: Yeah. Paul Reiman: it worse. Let's not make it harder. Let's pay attention so that if that continues to be the trend we can sort of migrate to it. You James: Mm. Paul Reiman: know, but I don't know if the world's quite ready for, you know, sort of the let's just pretend like we haven't trained people to think this way. Like I don't think we're there yet. James: Yeah. Well, I think one of the interesting steps that Stefan Gaertner mentioned when he was on with me, which I was interesting, he said that if you truly have to remove subjectivity, which you kind of do, like, you know, that's what we're moving towards, then you come down to objective measures of performance where possible Stefan Gertner's point was, we're kind of coming down to a pay equation of some kind. We're coming down to an equation that determines your pay. And I wonder, that kind of already is the step, because when you do pay equity reviews, there is an equation. And it's driven by multivariate regression analysis. And there is an equation which basically says, this should be your pay. Based on everything objective we understand about the role, this should be your pay. So wonder if you see the pay equation as being something that companies will adopt at some point. Paul Reiman: I mean it's out there, right? There are already examples of people that literally have a formula, right? This is what your role's worth, this is what your location's worth, this is what your experience with us is worth, and as a result, your salary is X. Like that's not completely foreign. That said, I think for most organizations, even though you think about pay equity, like, you know, it only pops if it's sort of provable that it's not the same. There's a lot of root leniency still in the math, right? whether it's a five percent gap. Or, you know, as codified in UPTD or whether it's a 95% confidence interval in this sort of stat speak language. Five percent's a lot, right? A five percent gap is not immaterial. so I I do it can, it can absolutely contribute to that, James: And it's enough to feel like you're not paid fairly as well. That's the thing. Paul Reiman: right? If you're on the low if you're on the wrong end of that five percent. Now, I've also been on the low end of that gap and felt okay about it. James: Hmm. Paul Reiman: meaning there was transparency, and this is when I was an employee as a consultant, where I could objectively Not necessarily quantified, but I could see, you know what? They're right. Like that worker is worth more than me. They have more experience doing this kind of work. They in this particular case it was sort of more skill on exec comp, which was very valuable back in two thousand and four, I know that this person makes more than me, but I I'm okay with it. Like I get it. you know, so James: It's kind of like if you're an intern, come into a company, you look at the CEO and you think, wow, how do they do all that stuff? How do they know all that? You wouldn't expect to be paid the same. So there are degrees of fairness, isn't it? The problem is the squidgy gray bit in the middle where it's not quite clear. Paul Reiman: That's right. Totally. And the reason I felt good about it is that organization was very clear on sort of like we value the things we can as a consulting firm, we value the things that we can be profitable charging for. As a result, certain skills are worth more than others. Yep. Your demonstrated ability to be productive matters. Yes, the subjective feedback from clients and from internal team members matters. But I knew the scorekeeping system. It was very clear to me. what was gonna produce a higher pay over time. So I you accept it. Like I knew that and I was okay with it. James: Hmm. Paul Reiman: Now I know what I can solve for if I'm pay motivated. I mean I wanted to get better at those things anyway. And it was helpful to know that I would make more if I did those things. Like for my own psychology as a 22 year old kid that, you know, wanted to make more money. So I mean I think that's what that what that's what helps in those gap situations. It doesn't have to always be a sort of a disengager. It will be for some. But I think it it is when it feels like a mystery or it feels like it's, you know, predicated on something other than, you know, James: Hmm. Paul Reiman: something that I signed up for. James: Yeah, it's an interesting point, but it's always kind of similar to you, very similar. when a lot of people talk about skills-based pay, this always comes back and around in circles every so often. And as someone that did their accounting badges, I know what that looks like, because accounting and law, they are very established professions, and therefore they can have skill-based pay because everyone agrees on what those skills are. And there is something very useful early in your career to know exactly what you need to learn, when you need to learn it. what your pay increase is going to be as a result of you learning those things. But the entire profession revolves around that set of, and I say comp and HR, professional services angle at least, does have that as well. It's not quite as, you know, there's not a body, there's not like an Institute of Chartered Accountants or CPA, whatever it is. But there is an established set of assumptions. For example, exact comp really is the high value skill So I think early on in your career it's very helpful to have that laid out. And when I'm designing leveling guides as well, I wonder if you do the same thing here. I think at the lower levels, it actually is really helpful to have a few more words and a few more examples so people can visualize where they're going to go. It's the middle and the top that it gets a little bit more inhibitive, I think. Paul Reiman: I agree. We we talk a lot about how like your leveling criteria in itself isn't helpful to anybody. It's more about like how do you humanize it for me. So if I am an accountant and I'll just use sort of generic industry speak of P one, fresh out of school accounting, it is very helpful to know. Be able to do these things as an accountant and that's how you will grow. Not because I want you to chase the nickel of learn it so you can make more. But it's sort of working backwards. Like I know someday I would want you to be a more advanced, you know, fully functioning accountant and I'm building you a roadway to get there essentially. Like you're gonna have to learn these things over time. But it's gotta be very specific. Like I I think that is helpful. As a leader, the job's forming around me. I mean, people hate it when I say that, but like we pay less for a set role and we pay more for what the leader makes the role at James: Hmm. Paul Reiman: some point. You know, my job description at each of my operating stops was completely irrelevant about three months after I got there. Because you see sort of what actually needs to get done, sort of the function that they want you to play, because I was the only one. There was no ten of me. There's one of me in that job. Right? So James: Yeah. Paul Reiman: like don't put criteria on a on a thing that tells me what to do, because that might not be what you really need me to do now. And James: Hmm. Paul Reiman: we don't want, you know, a a whole army of robots chasing that skill on the matrix to make a little bit more money. James: And that's then if that's what you want, then use AI at this point. Like if you know exactly what it is you need to do and when you need to do it, then you can probably automate it at this point. Yeah. Paul Reiman: Yeah. Like just just program it at that point. Yeah. James: No, and that's another argument against really granular job architecture as well. If you have granular job architecture, you have granular job descriptions. If you have lots and lots of levels, you have lots and lots of words. And it's that old joke of what's the difference between very good or proficient at, you like you end up with these silly little words that don't really mean anything. And the minute a manager gets quizzed on it, they're going to fall apart, you kind of like Paul Reiman: Totally. James: you would get asked what best practices like the minute someone starts challenging it, it starts exposing the weakness underneath them. Like, yes, I can define the difference between an intern and the CEO. Can I design, can I define the difference between senior and senior advanced, you know, or whatever, it gets much more difficult when you Paul Reiman: Yeah. Totally. James: start adding levels in. Paul Reiman: Yeah, I call them co like the Cosmo quizzes. And I don't even know if Cosmo one still exists or two does these anymore. You know, but it's like that self diagnostic, like rate yourself on a scale James: okay. Paul Reiman: of one to five and you know, magically whenever I would look at one, I was the most romantic, most handsome, James: Ha Paul Reiman: best partner in the world, right? Like 'cause I I could read those words and be like, Well, of course I do that James: Yeah. Paul Reiman: right. But then, you know, ask my wife to answer the same questions and maybe I don't sort of get all the way down to the scale. James: Needs improvement. Paul Reiman: Yeah, exactly. But I I think, you know, the more words kind of runs that risk, right? It starts feeling more like a horoscope and less like something I can sort of manage to and you know, people will find a reason to be a advanced senior something instead of a senior something, because there is a word there that they can say credibly probably. Yes, I've done that, but that's not helpful to anybody. James: there are a lot of nice words in this book, which seems like a ridiculous thing to say. It's a book. Is Paul Reiman: That's what a book is, right? James: it what a book is? Yeah. So I've been struggling with this for some time now. This is what I've been getting wrong. But there are a of nice phrases that kind of visualize and metaphors and good ways of explaining in layman's terms what the point is you're trying to make. And then you go into the details. And one of those phrases, the loyalty tax. And I really like this because I've seen this and I think anyone listening has probably felt it or seen it or had to administer it. And you call the loyalty tax the single most damaging consequence of the traditional pay model. So I'd love to hear a bit about what it is, what this arithmetic is and why your best people have the biggest problem with this. Paul Reiman: Yeah. Yeah. So first, I don't think I've invented this one, right? I'm pretty sure I heard it somewhere, but nowhere could I find like an original source for it, nor could AI. so I'm try I try to be James: Hmm, okay. So safe. Paul Reiman: careful in the book of like not claiming it as my invention because I'm pretty sure I've picked it up from somewhere. but the math is still helpful and real and as a result we talk about it a lot in the book. So the premise is somebody joins and maybe they just start a little bit lower than midpoint of a range, right? If I use CompGeek speak. They're gonna they're gonna peg along at a couple percent a year, some some good years, some bad years, but let's be honest, it's gonna be plus or minus one or two percent from three percent over the course of time. Well, in that in that horizon, the market's going to be more volatile, vol volatile than that three percent increase, probably. So somebody's gonna come in and make more. And then that's going to compound on top of it. Right. So workers who join an org and stay there end up pretty far behind if there isn't an intentional mechanism to sort of keep them caught up. and we've just seen that over and over again. You look at the data that you know even our government reports on, right? Stayers make less than leavers, James: Hmm. Paul Reiman: which Not everybody who stays is a bad worker. Like people stick around who are good workers and there's no objective reason why they would necessarily make less than their job moving counterparts. That the movers are just taking advantage of a market. And it's that's the loyalty tax. It sort of penalizes those that have chosen to stay, James: Yeah. Paul Reiman: relative to those who choose to move. And, you know, we vilify it a little bit in the book because it does, you know I don't think employers are always doing it intentionally. Like, I'm gonna take advantage of James because he hasn't quit. I'm only gonna give him a three percent raise a year. It just happens. Like it's just a natural consequence of the once a year merit cycle that I can't afford to give much of an adjustment. Whereas when I'm hiring somebody, I can always afford to go all the way to the top of that posted range. It's James: Hmm. Paul Reiman: just the consequence of the system. James: this is one of my points of great infuriation, benchmarking your merit budget, who the hell cares what other companies have to spend on their people. Like it drives me nuts, this 3%, this three and a half percent, because to me, like what you're trying to do is use salaries as a means to delivering the value created back to the people that create it. That's kind of what we're trying to do here. Equity is a great way to do that. Louis Kelso would have argued that we should only be using the equity and dividends are the only means of transferring the value back. We need to abolish the salary, which is an interesting thought experiment, if nothing else. Paul Reiman: Yeah. James: But the idea that you should give as little as possible back to your employees drives me nuts. And the benchmarking of that is infuriating because that is pure extraction at that point to me. That means you're taking value away from people for somebody else Paul Reiman: I focus less on the what I know people can afford, but I agree with your frustration on the why would we care what the survey says increases will be? It's just a I mean we're all guessing, honestly. Like when those survey it's this self reinforcing loop. They asked, right, think James: Yeah, self reinforcing guess. Paul Reiman: about this. Like we're recording this in September of twenty twenty six. In July, June, July, they asked comp people, like, what do you think your company's going to do in twenty twenty seven? Most comp people went, three percent, sounds good. Maybe it'll be a little bit higher. I'm gonna get aggressive. I'll call it three and a half, right? And that gets totally there's no prove it, right? James: And it's just a number in a form as well. There's no accountability on this. Paul Reiman: So that gets codified, released, then a nice shiny press release from whoever's doing the survey. CFOs hear it and go, thank goodness. Only three and a half percent this year. Like we should all collude. I should have put this in the book. If you were reading this, budget for nine next year, and let's see what happens. James: Yeah, yeah, yeah. Paul Reiman: Right? Like that'll move the median up. And then everybody will go, my gosh, it's a hot market. We gotta pay five. Like it is just a self-reinforcing cycle of let's keep it at three. I also find the way it gets interpreted handcuffs organizations quickly. Right. So like they're okay, well, it's three, and then maybe I'll set aside another one percent for promotions. Well, that that compartmentalizes the budget. It forces me down a path of saying, Well, I can only promote so many people. When it might legitimately be that James is ready for promotion. He's earned the right to do that. So you just create these artificial barriers that just they just create friction and it that James: Yeah. Paul Reiman: it creates all the spin and spiral and rework and frustration among an organization trying to spend the money, which is all James: Hmm. Paul Reiman: sort of built upon a shaky foundation to begin with. So it is it's maddening. We call it shoveling you know, you're shoveling against the tide, right? You're moving the sand and then the tide James: Yeah, I saw that. Yeah. Paul Reiman: comes in and just pushes right back to where you started. Like you have to be a bit James: I like it. Paul Reiman: more aggressive and think a little bit bigger about what you're really trying to accomplish here. James: Yeah, absolutely. I think I do think that's where you can differentiate yourself as a company. We are not the set that company that constantly tries to limit your pay increase and your promotions. We're a company that does actually look at our own situation and decide what we can afford. That in itself, weirdly enough, is a differentiated compensation philosophy that most companies don't have. But the Paul Reiman: Yeah. Yeah. James: artificial scarcity drives me nuts of both promotion opportunity and merit budgets. then we make people compete with each other for it. That's the Paul Reiman: Yeah. James: thing. it's like the scene in like The Dark Knight, when the Joker takes a pool cue and snaps into, and only leaves one half of it between two. That's the merit budget right there. Paul Reiman: Yeah. James: You've got to kill each other with a pool cue to get enough, to get Paul Reiman: That's true. James: your opportunity from promotion. Paul Reiman: There's also a little bit of we're lying to ourselves as well. So there's this metric that I've tried to popularize. So it's sort of like same store sales and retail, right? Where you look at, you know, Starbucks growth rate in a given year is sort of X percent. Some of that is because they opened a ton of new stores in a place. I mean, I'm thinking back to a past era probably. Right. And some of it is what is a core box that you already have? How is it growing? If you do that for employees, right, if you actually look at sort of an employee who was here a year ago or two years ago, how much does their pay go up? It's often much higher than that budget anyway. Right? 'Cause James: Mm-hmm. Yep. Paul Reiman: a job became open and they were the right person for the job and they took it. so there's a little bit of honesty we need to have with ourselves, which is that's really what you're managing for. Like as people stick around, do they get ahead? Do they make more if they want to make more? Yeah. And typically more than we even publish. Right? 'Cause it's not just this one salary increase that can happen. So it's it it frees the mind to say, let's think bigger about how people actually experience pay growth, let's measure that differently, you know, and and design program around it. Do I even need this once a year cycle if there's other ways people can get ahead? right? If you if you just expand your mind a little bit from the traditional, yep, it's three percent plus one percent and gotta figure out a James: Yeah. Paul Reiman: way to divide this tiny pie. James: Yeah. One of the things you mentioned actually is that you like the idea of a market adjustment budget funded separately. And you can actually calculate what that should be when you look at the market Paul Reiman: Totally. James: data. When you get the market data, you can say, well, how much has the market data moved? Therefore, what should our market adjustment budget be? So you're a fan of that room. Paul Reiman: Yes, and and and specifically so it can be deployed to where it's needed. So one of the one of the mistakes that I made when I was in house was you could do that math and say, okay, it suggests in aggregate we're four percent behind the market. So let's make our budget four percent. The problem is it's not symmetrical. So James: brain. Paul Reiman: having that th that's why sort of the argument for separate budget is you can be a bit more surgical about how it gets deployed rather than democratizing it assuming every manager knows magically where to deploy it. You know, with all of the biases and challenges that get wrapped up in that. Right. So that's that's the logic of a separate number is it's it's not equal. Like I can measure the gap and I want to invest in that gap. I I can't distribute it then. It needs to be more controlled. James: One of the things I wanted to get your opinion on actually is self-sat pay. And this is the idea. And there's a few companies that have done it. Semco was the famous example in the 80s that did it, the first documented example I could find. But then since then other companies do this. Smarkets in the UK did it famously and then undid it because they found it was taking up too much time, which is obviously telling. But the idea is that once you're transparent with your finances, Once you're transparent with your pay, once everybody's ideally an owner at the same time, then they are the best place people to decide among themselves what their pay should be transparently. have you seen any of that? Have you done any of that? What's your experience with this? Paul Reiman: Yeah. The closest I can say I've actually set up is around it's pretty marginal though, to be honest with you. It's more trade a few points of bonus for salary or you know, the mix of equity vehicles. you know, and the logic there was I think similar, but not the same, which is offering some form of choice tends to increase satisfaction. Right. So if I if I tell James You have to eat skippy crunchy peanut butter. There's a good chance you're either really happy about that or not really happy about that. James: Mm-hmm. Paul Reiman: If I say you're gonna eat a peanut butter sandwich, but it can be crunchy or creamy, you're going to be happier. Even if you landed on the same crunchy peanut butter that I offered in the first scenario, right? So it was more in that case. It's like, can we increase satisfaction on the margin? Because I feel like I had a say in how James: Mm. Paul Reiman: this works, which is that's why I say it's similar because there's choice, but it's a different motivation. It's not like decide how much you want to make or how much people should make. It's more I'm giving you a basket of choices, A, B, or C. I'm okay with either, right? They're economically similar enough to me. And they were. We would design them so they were economically pretty much similar. But it gives you James: Mm-hmm. Yeah. Paul Reiman: a little bit of say. So that's the closest I've been to sort of self set is more on the margin. I'll give you some choice. James: Yeah, it's full of problems, obviously. And the time for me was the big thing, like how much time have you got to spend doing this? If you've got flat structures, simple structures, non-negotiable pay, then self-serve pay kind of falls out the window anyway. It's one of those things that I'd love to try in a group and just see and document what happens with it. That's Paul Reiman: Yeah. Yeah. James: conversational problem. But I do think your point about having inputs really interesting, because the Hawthorne studies, famously, back in the mid-20th century. And they did this wonderful experiment where they were going to play with the lighting. And they said, we're going to put the lights up. When they said they didn't close, we're going to experiment with different working conditions here and see what impacts your productivity. This is in the era of scientific management where everyone was all about people and machines, and they need to produce as much Paul Reiman: Right, right. James: as possible. And they put the lights up. Productivity went up. That's interesting. And they put the lights down. Productivity went up. That's interesting. And it wasn't anything to do with the lighting. It was to do with the fact the employees had been consulted on the conditions that optimize their work. That's what they like. So that optionality, just giving people a say in the conditions Paul Reiman: Totally. James: for their work and extending that to pay, I do think it's got tremendous power, zero cost option for actually improving Paul Reiman: Yeah. James: engagement. Paul Reiman: And I spent a lot of time defending what we were doing, because it it just so happens that a a solid majority of employees will often pick the same thing and it becomes very tempting to say, Well, we should just do that. Right? So if seventy percent of employees when given a choice between a slightly higher salary or more money but in the form of variable pay, more will choose the salary, right? They actually give up the the extra cash in exchange for security. I think it comes back to the sort of loss looms larger than gains. Everybody's had a bad bonus experience and they remember that. So let's take the VIX Cup. Okay, great. So then leaders say, Well, why would we ever offer them more money in total if we know we can sort of get them at this? And I'm like, but that's not the point. Like the point was the choice. Right? Like we believed that people would feel better about the outcome one way or the other. Like, so my counterpoint is why would we take away that choice if we know they're gonna pick the low one anyway, right? We gave them an option and for the person that wants a little bit more risk, they trust us, whatever the circumstances are, sure. Like we said we were good with both. So why are we changing our mind just because some people Yeah, but it was it became a debate real quick on like why do we have to keep this choice if seventy five percent of people are gonna pick the same thing? James: you Paul Reiman: I'm like for the twenty five that didn't. Like those twenty five are gonna feel better about the fact that they had that choice. James: Exactly. that's thing. So many decisions fail with this thing. They assume rational economic decision making among people. And I just had Dan Ariely, who Paul Reiman: Yeah. James: wrote Predictably Irrational and his Behavioral Economist. And his whole point is that people are not rational decision makers. And that's a good example right there. Like, it's not about you knowing what's best for them. It's about people feeling they've got ownership of their decisions. And we come back to this again and again in research. Autonomy is huge. given people a say in how they do their work or how they have a pay a set or how they operate or who they report into, or how they organize or what team they're in or what project they're on. That autonomy is so powerful and doesn't cost anything. And to your point, just because you know what they're going to do doesn't mean you take away that autonomy because that, again, that's going to cost you. Paul Reiman: Totally. Totally agree. James: Fix the front door is the heading of my next topic. Paul Reiman: Yeah. James: So, and you have a wonderful quote, which I love because it's from one of our favorite movies, Coffee is for Closers, which is from, do you remember the movie? Paul Reiman: That is fr it just bro my gosh. Glengarry, Glen Ross. Yeah. James: Glen Gary Glen Ross. know. Whenever, whenever you put, you'll put on the spot to remember the name of a movie. It's very important. It's like, that movie with the, with the Jack Lemmon and the, yeah. Paul Reiman: You forget it. It's just the way it works. But yeah. I was picturing it and I'm like, my gosh, what's the name of the movie? Yeah. James: great movie. So anyone's listening and wants to know sales, wants to know what sales is, watch Glenn Garry or was maybe in it. Yeah. Watch Glenn Garry. Yeah. Paul Reiman: Or was. May not may not be exactly that way, but the leads don't come on index cards anymore. But James: Yeah. Right. Yeah. But there's, mean, there's a digital index cards. Like there's a Salesforce Paul Reiman: Yeah, that's right. James: site. Some of it's been swapped out, but it's such a good introduction into the world of sales and what people care about. the quality of the leads the coffee is for closers is one of the best lines in movie history. So tell me a little bit about this, like why you use that quote. And you mentioned Lori, the recruiter, because recruiting is sales, The recruiter who had coffee is for closers on her, mug and what you found when you pulled apart New High Up A. Paul Reiman: Yeah. So Lori was a fictionalized name 'cause I don't want to embarrass anybody, nor did I get permission from her to tell the story. But you know, talent acquisition often becomes rec chasers, right? They they need to close a role, right? They're measured on the speed with which they get somebody in the door. They are managed to a certain workload, right? It's a quota. It is a sales job. It's how do I get somebody in the company as fast as I can with everybody saying yes. And what I learned in that environment was Lori was basically giving everything she could possibly give. right. She was cons I I could spin it positively and say she was very generous with sort of the company's investment. Well, of course she's gonna move a little bit faster, right? she removed friction from the hiring process. So, you know, what what the aha for me was we're gonna spend months arguing about a three percent increase versus a four percent increase for somebody. But we are not paying attention at all. To the 15% of the company that we are gonna hire in this year that wasn't here last year. Right? So like the front door was wide open. Anybody could go through however they needed to go through with little measurement, little governance, other than a recruiter and a manager had to agree and it had to be within some pretty broad parameters. So that's the whole premise of fix the front door. So James: Hmm. Paul Reiman: think about how are you bringing people in? Because it's the source of the loyalty tax, right? It is the creator of inequities in in a very in a variety of forms, depending on how you do or don't sort of think about the right offer to give. So it's James: Mm-hmm. Paul Reiman: just it's insane to some extent that we spend all this time on how do I invest or not invest in existing employees when relatively little attention has been spent on how should we best invest on people coming in from the outside. So that's the premise of fix the front door. And, you know, for in Lori's case, we had to put it in some measures. Like Our intent wasn't to take away all the tools of the trade. The intent was you just can't always float to the top. Like, did you know that you're the only one doing this? did your leaders know that you're the only one sort of taking this strategy? And honestly, she still was a great recruiter. Like even after sort of we put some measurement in place, she changed a little bit of how she approached specific roles, you could still attract talent, right? James: Yeah. Paul Reiman: We just governed it a little bit differently and as a result, inserting a little bit of friction produced much better outcomes and she was James: Mm-hmm. Paul Reiman: still a good recruiter. Like we didn't take away Lori's ability to survive. James: And so I'm curious, because they're normally committed, they've got commissions against the year of salary, right? But it varies, it varies. Paul Reiman: Some do, yep. Yeah. James: should recruiters have discretion and pay at all? Paul Reiman: Yeah, I'm not a big fan. I think I think that hiring I still believe, and I think you and I disagree, I still think hiring managers should have some ability to influence the outcome. Like 'cause if you don't, you end up with other points of friction, right? Like, well, this person's not really a senior engineer, they're a senior engineer plus. so I make up a new job for them. Like that creates other problems. So I do think, you know, on the margin there is some room for flexibility. But it should not be willy-nilly discretion. The recruiter doesn't know that. Like the recruiter's James: Mm. Paul Reiman: job is to find great talent, make sure they're a good fit for the company, and facilitate a good decision. So, like who owns the discretion, if we want to use the word discretion, I I don't think it's the recruiter. in my view, right. It's more the manager. James: Yeah, I think we agree on that. Paul Reiman: The manager needs to believe that that's the right amount to pay that person. Like good things James: Yeah. Paul Reiman: come when they believe that that's fair. They'll have good conversations with the employee. It just creates the right foundation for a relationship. but it needs to be justifiable. It can't just be like, I like James. James is funny. James plays the bass guitar, so I wanna pay him a little bit more. Right, exactly. James: Yeah, yeah, I play the bass guitar too. that's, that's, you know, favorite. So which, which brings me to point, but I don't think we actually do disagree. So what there is one world here where you have non-negotiable pay and no, no bands at all, which I think is delightfully simple. And there are companies out there, several companies have done this. And I had Andrea from 37 signals on. She's like, it's just easy. Like then there's no, there's no complaining. There's no discussion. There's no debate. We keep people. And there are other companies that do that. But there's also a world where you just let autonomous units figure it out for themselves. And I do think the centralization of pay, the centralization of the budgets, the centralization of the architecture in big companies, it disenfranchises managers to truly be managers. if Paul Reiman: Mm-hmm. James: you look at the other extreme, which is fully decentralized, companies like Haier or Morning Star in America or Nucor as well as fairly decentralized or Handelsbanken company in Sweden, these Paul Reiman: Mm-hmm. James: companies don't have centralized pay. They limit centralization to the absolute minimum legal requirements, which with pay transparency legislation is growing a little bit. But I think if you're a manager and you are given pay and pay transparent, maybe that would be the thing I would centralize. You have to be transparent around all those decisions. So you know when you bring someone in on a high amount or a low amount that everyone's going to know about it and it's going to be visible. Paul Reiman: Right. Mm. James: then I kind of like that one. But then that empowers managers to actually think like owners and act like they own the company and make decisions. And we always say we want people to think like owners. So well, then you've got to let people act like owners. can't say think like an owner, but also, hey, we're only going to give you 3 % merit budget. And you can only promote like 10 % of your population. So to me, and you talk about this in chapter 9. So I'm going finally get back to my question. Because you talk about in chapter 9 against, you talk about the case for paying everyone the same and the case for bands which is kind of what I'm saying. So where did you where did you come to on that? And where do you think that debate lands? Paul Reiman: Yeah. My conclusion was it's not gonna be one or the other for a whole company. that it's sort of role and work specific. If there's some element of objectivity, if you know, if work is more similar than different, the right answer is to like keep it simple. you know But there will also be roles where it does make sense to have some differentiation. One, because that's just how people are doing it, right? There's still a little bit of I don't want to be the fifty year company, right? When f for the next five years I still have to compete for that person. you know, so it's somewhere in between. And the question isn't is it different? It's more can I defend when I choose it to be different? That's sort of the key punchline of that chapter, right? It's not you need to pick a side. And s as f as fun as that is to debate, right? Sort of one side or the other, it's more make decisions that make sense and be ready to defend them. And if you can't defend it, then you should probably go to the other side and sort of keep it simple. you know, it's it's in a later chapter where we talk about sort of the teams that won't be left behind in this. And sort of rule making and rule enforcement is is a relic of the past in our view. you know, there's an archetype James: Mm, I like that, yeah. Paul Reiman: of sort of comp teams that we talk about, the enforcer. And like, no, James: Mm-hmm. Paul Reiman: this is the standard. I'm gonna centralize the decisions and if you can't go outside of them, I think that's just gone. All right. Now it's more James: Damn. Paul Reiman: about being an an architect or a catalyst are the words we use. It's like how do you create system structures and guidance that people can use? And then your job is to make sure that that guidance structure sort of still is working the way it needs to work. But you don't really touch you're not centralizing anything. You're sort of giving James: Yeah, as a centralized comp function, Yeah. Paul Reiman: tools to let people make good choices. James: Mm. Paul Reiman: and then if the tools aren't working, change Right. That's the role James: Yeah. Paul Reiman: of the comp person. James: Yeah. And that's kind of the way like Spotify ran for a while, the idea of kind of guilds, like you'd have a comp guild and they're coaches though. They're not centralized control functions, they're coaches and they're offering guidance on how to align to the Spotify's central policy within whatever degrees of freedom you see fit as a leader. And again, that gives people that autonomy, I think so many people that go into manager roles get so disappointed because not only do you stop getting to do the work that you enjoyed and probably got to the point of being recognized that you could get promoted into the manager role, but you're now just an enforcer. Now most of your job is just enforcement of policy and the word policy Paul Reiman: Totally. James: relates to police. it's, it's you're a policeman at that point. You're just making sure people aren't doing things. You're not making sure they aren't doing things. Let's talk about incentives. Let's talk about variable pay, There's a spectrum of possibilities here. And you have some stories. I won't ask you to pick your favorite story here, but you talk about six jobs that a variable pay plan can do. and you're specific about the circumstances in which variable pick can work. But pick your favorite, like, because you've got your wonderful storyteller. So what stories do you have in here about how incentives can or cannot work effectively? Paul Reiman: Ugh well most of in the front end so the way the book is organized, sort of the front end is the problem statement, sort of the second half is sort of I don't want to call them solutions 'cause I don't want it to become best practices because they're not. They're more James: You Paul Reiman: things that sort of work. you know, I think there's just so many good examples where you you know, we all think it's working great because that person we love and we think is a high performer makes a lot of money. you know, one example in there is the just sitting on a really valuable territory, right? and this is in the sales context where like They just they got a great place to be and as a result they're making good money. you know, I think another one that's in there is around like that just in this this I think you speak to this greatly in your own book about sales comp. Like they just kept adding something, right? Like and that's one one of the stories. It's like the plan has never, you know, doesn't really change was the way the client described it. But that meant it was a really small tweak every year for twenty years. So it didn't look anything like it started. James: All right, 20 tweaks. Paul Reiman: Right? So it it does change quite a bit when you think of it that way. Like, we make a lot of bad choices in incentive design. Like i if I had to pick one functional area within comp that was part of the catalyst of the book the most, it's sales comp I spent a lot of time James: Hmm. Paul Reiman: designing sales comp plans that I'm pretty sure don't really make a difference. James: Fine. Paul Reiman: like in the end of the day. I mean, and this is the you know, in the six jobs sort of framework, one of those jobs is to motivate. And I think most incentive plans don't actually motivate anybody. Right? Like I think you and I agree on that. Most motivation comes James: Yeah. Paul Reiman: from wanting to do a good job, wanting to be successful, that intrinsic view. I do think they still have a purpose, right? Like it's good for me to know if if you and I are doing the same thing and it's sales and I sell a little bit more, I might want to feel like I got a little bit more than you. It doesn't necessarily motivate me to go something else go sell something else. But I'm more engaged and I feel better about my relationship that it's fair with the employer because it was shared with me. Right. So it doesn't mean incentives go away. It's more, let's stop kidding ourselves that James woke up this morning trying to close one more deal because he's gonna make $100 more. Like that can exist, but that really doesn't exist as much as you think. And I think I used to think it did. Like I thought it motivated action. James: Yeah, likewise. Paul Reiman: And the more I see it, the more I realize it rewards action. It doesn't necessarily James: Yeah. Well, mean, we actually, again, as always, we stretch each other, but we largely agree because your point when I was on your podcast was that I think maybe incentive is just a terrible word for it because incentives, you can get people to do a little bit more of something they decided not to do, but then they're always going to expect a little bit more to do a bit more. So you're coaching people to be wealth addicts and Phillips Slater's words. But your point is it's just a fair reward for the work you're doing, which we completely agree on. so you've worked with a printing company that did a wayward sales incentives, which tells us a lot about where they do and don't work. So tell me a little bit about that case study. Paul Reiman: Yeah. So this was this was you know, years ago at this point. Printing is a miserable business over the last fifteen years. So I won't I I can't claim that this drove sort of sustaining shareholder value, but I think that's a different reason. But they realized that selling for them they wanted to be different. Like they were extraordinarily focused on good quality customer outcomes. And that did not mean finding a way to charge a little bit more for this project versus that project. for those that know anything about sort of large scale printing, you're never selling alone, right? There's somebody who has to figure out how much paper, how much ink, what's the production time, what's this gonna cost us. There's a whole engine of people sort of supporting that deal. so the company was like, Why am I paying Paul the seller some percentage of that deal? When he's he plays an important role listening to that customer, translating that requirement. maintaining good relation with that customer, solving problems when it comes up, but that's no more valuable than the person who's figuring out, can we even do this? Like coaching them on, you know, you asked for this kind of paper. This might work better. What do you think about that? Like that's equally valuable. I'm not going to give them a percentage of the sale. Not to mention it's just as valuable as a person running the press on the day that we do the job or getting it to their customers, right? Like everybody's creating value. So why are we calling this role more valuable than another? We said everybody just gets a salary and a profit share. That's it. Like that's our pay system. And people who are great at sales, yeah, we'll we'll find ways to recognize them. Yes, inevitably, many of them found ways in advance within the company. But they didn't have to pay a commission to do it, right? Because they found James: Mm. Paul Reiman: that that wasn't how they wanted to pay. And people didn't need that motivation to do a good job with that customer. if you sold printing services, there are only so many places to go. James: Yeah. Paul Reiman: You know, so it's like and there's even fewer now, right? So like it it James: Yeah. Paul Reiman: was a talent market that they didn't have to worry about matching everybody else. Like, no, we're different here and we're okay being different here. James: Yeah. That's a really good example. Let's spend the rest of our time talking a bit more about sales because I do like that it's really at the intersection of pay and performance and people and human psychology, First thing, I wonder, have you come across the Chasing Stars study by Boris Groysberg Because I wrote a piece about this in my sub stack over the weekend. Yeah. Okay. Paul Reiman: That would explain why it sounded familiar. I think I saw I saw it in your sub stack. I had not seen it prior to that. I love I love where it was headed though. That's for sure. James: Yeah. And there is a book, which is very interesting, which is about this research. But the point is, when you think you see a high performer, you see a collection of reasons that person is performing highly. And what frustrates me is he didn't do it with sales. He did it with banking. Because he wanted to do it with knowledge work. So you wanted to do Paul Reiman: Yeah. Yeah, the analyst. James: it less transactional. But the point was that whenever you took a high performer and a bank poached that high performer, they tended to do terribly when they moved to the new bank, unless they came with their team. So the point was that there's There's all kinds of things. There's the brand, there's the analysts that come with them, there's the sales machine, there's the marketing or whatever. There's all these other factors. So with sales, I do think it's the same thing. We love to see these great sellers. They are amazing superstars. And there's also this human tendency to, see superstars as naturals. We love to see naturals. Whereas if you ask them, say, no, I'm not a naturalist. I've really, really hard at this for a long, time until I could do something right. So that to me is one thing. We really want to see superstars and reward those superstars. But also, it does make me wonder, do commissions have a future in sales? Because increasingly companies know that lifetime value is what matters, not point-in-time sales. There's two extremes here. One is Paul Reiman: Yeah. Hmm. James: how much is that customer worth to you over a lifetime and their second degree referrals. And one is how much we make from that customer today. And that latter one feels like the old way, like the Glenn Gary, Glenn Ross way, right? But to me, Salesforce showed us the way a years ago when they started looking at customer success in such a sophisticated Paul Reiman: Yeah. James: way, which is that it's about your lifetime with that relationship. And so many people touch that lifetime that the ability to attribute that value to one person becomes increasingly difficult. And the last thing I'll say, because it's supposed to be about you not me, the last thing I'll say is that it shows up in crediting. And you see the complexities of crediting, Paul Reiman: Yeah, totally. James: particularly in consumption-based sales and how messy that gets and how many rules and policies you need to police that, that crediting and make sure it's fair. So where is your thinking on this these days? Paul Reiman: Yeah. I if I could just add to that example one more before I answer the question, I think it we actually will people will argue it both ways too, right? So I was recently working with a client who's like, I'm so sick and tired of paying these sales reps for the expansion that they have nothing to do with. right? So like they're not involved anymore. The c it was, you know, they're it's a consumption based play. So like the customer's just using more of it. So why am I paying the salesperson? I'm like I hear you. Let me also point out though, would you would you have that expansion if the sales rep didn't do sort of the job of getting them involved? Right. So I was trying to point out that attribution is really hard. Like it's really difficult to know. Was it the sales rep? Was it the product? Was it customer success? Was it a good support experience? Or was it just damn luck that resulted in that customer growing? Nobody really knows for sure. Right? You can't sort of say it. So I do think maybe this is another one of those examples, fifty years from now, we'll all look back and say, Huh, they really thought that they could pay people differently based on what they sold. I think for the next five years it has a place, largely because there's a whole generation of people who just think that's the way it's gonna work. James: Mm-hmm. Paul Reiman: but I do think there's stress on the margin for can I accurately do this? Can I fairly do this? There's a lot of what ifs in the exceptions that make when I was an operator in house, well what if somebody goes on leave for a month? How do I fairly reward for that? How do I James: Yeah. Yeah. Paul Reiman: not make that permanently penalize women more than men if I look at their actual James: Mm-hmm. Paul Reiman: pay over time? you know, what if I ask James to not cover San Francisco, but to cover Modesto instead, which is a fundamentally different market? Harder to blow the top off his number. Like there's so many things that reality gets in the way of it being as clean and simple as it sounds on paper, right? I'm gonna pay for what they sell. James: Yeah. Paul Reiman: Just doesn't always work out that clean. So I I think there's a reasonable chance that this is one of those things that go, you know, on the in the interim, we spend an enormous amount of time, I think you still do too, of like, how do you make it a little bit better? Let's at least nudge in James: Yeah. Paul Reiman: the right direction until you know, an organization or a country or a world is ready to think really different. James: around. And I think the direction we both nudge clients in is keep it simple. Like don't Paul Reiman: Simple. James: don't complicate don't try and this trick this idea that you can fix everything with the sales plan all these other non sales plan issues. And all they're not doing this. So let's put in the put in the cap for that. they're doing that. So let's put in the clause for that. And then then you just get these plans and that wonderful expression. They just pay me what they want to pay me. The salespeople is I don't know how it works. Like, like I give up, I just do my I just do my job and then I'll get some kind of commission at the end of it. Paul Reiman: Yeah. Yeah. If there's one thing I hope is nearer rather than further that's a change in this sort of, you know, avenue, it's I hope that less risk shows up in comp plans, right? you know, this came up in your conversation with Ariely of course, because it's a big thing in his research, or like raising the stakes produces worse outcomes, right? So putting James: Mm-hmm. Paul Reiman: somebody on a seventy percent of your income comes from variable comp will That's a lot. And that's going to change James: Hmm. Paul Reiman: how I engage with my work. it puts any inequities or challenges or unfairness in how I calculate that incentive really in the forefront, because it's a majority of what I earn. So I'm I hope sooner rather than later people realize that's just not smart. Like it maybe it's still okay to have some pay for performance. We can quantify it. We like that. They like being differentiated. Maybe it doesn't need to be that much though. Maybe there's James: Yeah Paul Reiman: ways that we can take the rate lower the stakes a little bit. still keep what we like about it. but you know, create a little bit more space and room for humanity and consistency and sort of team orientation. That's not look at the superstar who made so much money because all of their pay is at risk. I hope I think that might be closer than further. It's not fifty years. It might be five or ten. James: It's going in that direction, isn't it? There was a world where you had 100 % commission, and then it just don't exist anymore. So we've shifted Paul Reiman: Very rare. Yeah. James: to that. your point, we have lowered the stakes a bit. You just have to look at it. have to zoom out enough to see it happening. So I do wonder in five years, will the 50-50 plan be a thing of the past? Because that was too much emphasis, too high stakes. Paul Reiman: Yeah. It does feel like that's real sticky though, doesn't it? James: It does, yeah. Well, think SaaS has basically given it, I think, a stay of execution because SaaS is so attributable. And you have that ARR, MRR type number. And it is quite individualistic in selling SaaS But I think consumption base is going to really challenge SaaS Paul Reiman: Yeah. Yeah. I also think it's it's a perfect example of the common, you know, the best practice industrial complex here. It's like, well, you know, what what good sales James: Yeah, yeah. % million dollar quota. Paul Reiman: comp consultant doesn't have a slide that helps you understand payments and puts fifty fifty right in the middle? So like it makes it a James: Yeah. Paul Reiman: viable sort of default in James: Yeah. Paul Reiman: many circumstances. When we you and I both know we cannot prove that that produces any substantially better outcome than a seventy thirty or an eighty twenty mix. Like you cannot prove. In fact, it might even be the opposite. James: Yeah, we come back to best practice. Again, dogma really, best practice and dogma is the same thing. We just keep inheriting. And those slides, I've got slides, I would love to know who did the original version of them. I have no idea where they came from at this point. I've reimagined and engineered them so many times, but I can't claim authorship because I got it from somewhere. But yeah, that slide that shows the changing pain mix and the type of role it's suited to and the behavior is all, it's all just, it's optimistic. It's hopeful. It's like, this is what we hope will happen if we do this stuff and maybe it will, but you know, you don't really know for sure. Paul Reiman: Yeah. Yeah. Totally. I d I don't know who the originator is. I can tell you, and this is not in the book, but maybe it should have. When I was in my internship, I actually found an actual plastic overhead transparency. That's how old I am. Like pre PowerPoint slides, right? Literally James: Well, yeah. Paul Reiman: a transparency that had a hand drawn version of that slide, which I was told was dated from the very early nineties. James: Okay, that's earlier than anything I've gone. Paul Reiman: yeah, so and that would have been from he's now retired, Jerry Colletti would have been the original author of that. But at least James: Jerry Collette, okay, I don't know that name. Yeah, yeah. Paul Reiman: but so that's as far back as I can trace it. Could it be even earlier? Absolutely. That's as far back as I can trace it. James: So that's the OHP, as we used to call it in school, overhead projector. That's that big chunky thing, gray, noisy, hot thing with a lamp underneath it. Yeah, I remember. Yeah, Paul Reiman: That's right. If you were cold you sat next to it 'cause it would exhaust on you and you could warm up. James: I went to school in England and it was cold all the time in the classroom. So you got to sit next to the right side of the OHP, you got a nice warm draft to keep you warm in those lessons. So your epilogue, I'm glad you have an epilogue because I like epilogues. sure, people don't read them. But I like my epilogue where I sort of come back and collect my thoughts and get this one. And you ask, what happens if pay becomes quiet, fair, and clear enough that people stop thinking about it and return to their work? And I think we agree. very strongly on this. We want people to get on with their work. And Alfie Kohn made this point years ago as well, like it just needs to be generous, it needs to be fair, get money out of their minds. What can companies do, practically speaking, go away and do to start not necessarily achieving that goal, but to start themselves on the path towards achieving that goal? What would you recommend to them? Paul Reiman: Yeah. I think this might be too basic and simple, but I think it starts with an openness to realize that what got you here likely doesn't get you there. right? Challenge some of those fundamental assumptions. Is publishing that we are a market median payer helpful? Is an annual comp cycle with narrow budgets really helpful? Should we be giving recruiters and managers a ton of discretion upon hire? Like those are all the questions you need to ask. because I guarantee you they create more friction than they remove. so I think it starts with that. Now where where good, smart, well intended people can disagree is how how different does it need to be to produce a better outcome? Great. Keep disagreeing on that, everybody. Like I think we gotta nudge ourselves forward, you know. Don't don't worry about chasing utopia, but chase better. Right? Like James: Mm. Paul Reiman: one fewer point of friction is better than than it was, and then you can chase the next one. Right. So I think that's the it a willingness to improve and recognize that it's not going to be defending all the things we built for the last thirty years 'cause they're not gonna get us there. James: Hence the name, pay differently. Very well said. So I will close by asking, where can people find you? Where can people find your new book? I was also going to ask, are you going to do an audio book as well? Or does it lend itself to an audio book? Paul Reiman: yeah. Let's talk about the audiobook. Like I so my good friend Brian Briscoe, who people likely know we've been d speaking together for a long time, he goes, Are you trying to ask me to to to do the audiobook? And I'm like, No, one because he has a southern sort of slowness to him and it would make the book very long, and he'd be the first to admit that. I would need James: That's a good thing in audio. By the way, everyone listens to 1.5 or 2X on these days. All the kids, they listen to, et cetera. So if it's too slow, that's a good starting point. Yeah. Paul Reiman: That's good good point. Good point. It would need to be somebody with an accent. I think I everything sounds smarter when someone like James reads it, right? I don't know. It it's a little dense, I think, is sort of my thought. Like it it's actually architected to be a book you can kind of pick up and set down, you know, with a parallel structure between chapters so that you can this makes sense. Let me go learn more about that. Like it's not James: Yeah. Paul Reiman: really written because I can't read books cover to cover anymore. So it's it's written with like an ADHD brain in mind. So I don't know if it would work for an audiobook. I'd I'd love your recommendations and opinions. 'Cause I do I do consume audiobooks and I just don't know if I can see it in that vein. James: Yeah. I think you could. For all it's worth, I do think it could easily be an audio book. I think I might just do an audio book version for the script, which explains a few things in more literal detail so you don't need to rely on the graphics. And then you'd need to have a companion PDF with some of the materials from your website, which has been paydifferently.com Paul Reiman: Yeah. Correct. Well that's yeah, and that was one that was a choice, as you know fr from an author's perspective. Like layout and production of a graphic intensive book is actually really, really hard. James: Mmm. Yeah. Paul Reiman: to the point where it didn't make sense. 'Cause then you end up squeezing like too much into small spaces. So James: Right. Paul Reiman: we went down a different road, which is let's just put all the pretty stuff online where people can get it. So yeah, paydifferently dot com is a dedicated space. That also has a link to where you can buy the book if you're interested. just Put it in an email address and you get the pretty pictures that are sort of underneath it. you know, tools you can use, the stuff that makes the book really valuable, honestly, beyond just the thought provokers kind of live on that site, including sort of some OG slides from twenty eighteen about how AI was gonna change comp that I was right about for once, like in my life. Like the one time I've six Yes. predict James: See, I told you, I told you I can finally put it in a book. told you. Paul Reiman: the future accurately. I I'm gonna get as much credit for it as I can. So I had to even put the slides in there. But it's all at paydifferently.com You know, the comp world is not that big in the grand scheme of things. So like anybody who would care about the book, just connect with me on LinkedIn and send me a message too. Like the dozens of you or the hundreds of you. I can get to all those messages eventually. So like I would encourage personal outreach to an extent. James: Not for long, not after this podcast goes out. Now you're going to have to hire Paul Reiman: Ha ha. James: some kind of person to manage your inbox. And Paul's very busy right Paul Reiman: That would be a great problem to have. James: now. He's not good time to speak to anybody, but I'm happy to have him up at a deal. Yeah. Paul Reiman: It's great problem to have. I'm a big, I'm a big sort of asynchronous worker, right? Anything I could do for James: Yeah. Paul Reiman: my phone, I'm likely to do well. whereas if I have to sit and do it, it doesn't go as well. And responding to LinkedIn messages, I can do kind James: Mm. Yeah. Paul Reiman: of wherever, whenever. It's one of the things that I think made parts of the book as good as I believe they are, of course, I think they're good. It was written over a very long period of time, not forced in any way. So it was like, ooh. I like the way that that captures like the like the office refrigerator sort of metaphor. From my phone I could sort of capture that in my manuscript, right? Like whereas James: Yeah. Paul Reiman: if I was under deadline trying to create something, like I need this chapter today, it would not be as helpful. Whereas over James: Yeah. Paul Reiman: a nine month period, whenever it came to my brain, being able to capture something is what has helped make it be better, in my view. James: Yeah, I can tell. It's exactly the same thing. You come up with a phrase in the shower or something, and have to jot it down. OK, Paul Reiman: Totally. James: well, I can replace that whole paragraph with that one sentence. But it only happens if you give your mind enough time to digest the point you're trying to. It's like a sculptor, right? It will start off terrible. And you'll gradually Paul Reiman: Yes. James: sort of whittle away until you get down to something that looks like the point you're trying to make. it's not easy. Paul Reiman: Totally. Totally. James: It's a huge respect to you for getting it done. It's very time Paul Reiman: Thank you. James: consuming. And exhausting as well. Paul Reiman: You know it. James: I the closer you get towards the end, the more exhausting it becomes too, because you keep finding, just when you think you're done, you'll think of something you want to rewrite Paul Reiman: It's totally right. James: All right, well, I'll put a link into the show notes so people can register for that, but always a pleasure, Also, I will say as well, people should follow on your LinkedIn because you give a lot for free as well. So people should buy your book and support your authorship, but you do offer a lot of guidance on LinkedIn through all over the years, your blogs and your posts and everything you offer as well. So if you're trying to understand the weird and wonderful world of comp and all the strange people that roll in it. Paul Reiman: Totally. James: Paul is one of those strange people that cannot give you ton of advice. Yeah. Paul Reiman: I'm good with that. No, I appreciate that. Thanks, James. James: All right. Well, let's speak soon, All Paul Reiman: Thank you. James: Take care, Paul. Thank you so much for listening to this episode of Disengaged. If you enjoyed it, please remember to subscribe so you don't miss out on future episodes and if possible, please give the show a rating. Finally, if you have friends or colleagues that you think might find this interesting, please let them know. This is tremendously helpful and I do appreciate it. see you next time on Disengaged.